India
CRISIL Ltd launched its
environmental, social and governance (ESG) scores for 225 companies across 18
sectors in India, in line with its mission of making markets function better. The
ESG score factors in the track record of, and trends and disclosure standards
followed by, the 225 companies to provide a relative, pan-sectoral assessment
on all material ESG parameters relevant in the Indian context. It is based on
information available in public domain, including from third-party providers.
The scores are based on CRISIL’s proprietary framework and is assigned on a
scale of 1-100, with 100 denoting best-in-class ESG performance. The current
evaluation analyses three annual reporting cycles through fiscal 2020.
Ashu Suyash, MD & CEO, CRISIL,
said that, ESG is already playing a material role in the decisions of
governments, regulators, investors, lenders and corporates. Their survey shows
over 80% of issuers and institutional investors intend to integrate ESG in
their decision-making. The ESG research, data, insights, assessments and
solutions will empower customers and stakeholders to make decisions with
conviction, and contribute to sustainable progress globally.
The analysis shows companies with the
highest ESG score within a sector outperform the sector average by nearly 9
points because of significantly better performance on three fronts –
environmental parameters, overall disclosures, and sustainability practices.
On expected lines, information
technology (IT) and financial companies have relatively high overall ESG
scores, given their inherently lower natural-resource intensity, resulting in
lower emissions, waste generation and water usage. These companies are also
high employment generators and have relatively better disclosures.
Oil and gas, chemicals, metals and
mining, and cement companies have lower ESG scores, reflecting high
natural-resource intensity, and thereby higher emission levels, extractive use
of natural resources, potential adverse environmental and community impact, and
generally more moderate levels of disclosure.
The proportion of renewable energy in
consumption mix – an important environment score assessment parameter, remains
low at 14% on average. The number for the real estate, fast-moving consumer
goods and IT sectors is more than 25%. Gender diversity at the board level and
in the workforce of companies assessed remains low at 17% and 13%,
respectively. Independent director representation on boards, a tenet of
corporate governance crucial for protecting the interests of all stakeholders,
is at 47% with nearly 12% of companies having less than one-third independent
directors.
CRISIL is a leading, agile and
innovative global analytics company. It is India’s foremost provider of
ratings, data, research, analytics and solutions with a strong track record of
growth, culture of innovation, and global footprint. It is majority owned by
S&P Global Inc, a leading provider of transparent and independent ratings,
benchmarks, analytics and data to the capital and commodity markets worldwide. CRISIL Research is India’s largest
independent integrated research house.
Source: Crisil Press Release
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